Should Newspapers Charge for Online Content? To Answer This Question, You Have to Consult a Lawyer

A debate rages in what remains of the newspaper industry over the question of whether papers should charge for their content online or, as most papers now do, give it away for free in hopes of reaping faster overall revenue growth through internet advertising. As more and more publications contemplate their own obituaries, they are taking another look at the option of charging readers -- whether through subscriptions or article-by-article "micro-payments" -- for the content on their websites.

Information wants to be free, but the creators of information also need to eat. Which of these interests ultimately prevails, although partly a business issue, depends fundamentally on legal considerations. To charge for access to editorial content, the owner has to have the legal right to prevent competitors from offering it (or as much of it as customers are willing to pay for) for free. And thanks to the vagaries of intellectual property law, the boundaries of this "right" are, at best, unclear.

To illustrate: Suppose the New York Times moves all its content behind password protection and initiates a monthly subscription plan. And suppose news aggregation web sites like Drudge Report, newser, Breitbart, and, yes, Google News (the latter using computer algorithms, rather than journalists, to select news articles) republish on their sites the headline and first one or two paragraphs of the Times' daily stories (giving the Times credit, but, alas, no money).

Put aside the argument, advanced most persuasively by Google, that this practice is good for the Times because it creates Times readers the paper wouldn't have gotten on its own. Does the Times, which owns the copyrights and whose editors and reporters created the articles, have the right to stop these unauthorized uses, which we'll assume are undercutting its effort to charge for its content?

Maybe yes, maybe no.

The answer depends on the application of "fair use," a doctrine of copyright law that basically blesses (what otherwise would be infringing) uses of a copyrighted work when the uses are both insubstantial and deemed to be in the public interest (based on various statutory criteria). This maddeningly vague doctrine, whose application depends on the specific facts of a case, is a lawyer's dream because it requires virtually every dispute to be litigated.

Hypocrisy abounds on this issue. Fair use is championed by struggling artists because it allows them to incorporate others' work (for example, independent filmmakers' use of file footage) without paying extortionate use fees. However, the same artists, once they become successful, complain bitterly about fair use because it allows struggling artists to borrow their content without permission.

But back to our hypothetical: Even if the Times sues and succeeds in stopping competing news sites from copying the headline and lead paragraphs of its articles, those news sites can still avoid copyright liability by re-writing the headlines and tops of the Times' stories. Changing the wording -- the "expression" -- while retaining the essential idea or news information of the original, removes the copyright threat altogether. Copyright does not protect ideas or facts, just the way they are presented.

The Associated Press, which lately has taken to grumbling about news sites ripping off its stories, will have an uphill court battle trying to block online competitors who go to the trouble of rewriting AP's headlines and the top one or two paragraphs of its stories. But AP, which is owned by its newspaper-members, and already has licensing agreements with Google and Yahoo, may have a narrower objective.

Currently, news sites linking to AP stories benefit only the individual newspaper to which the links happen to point -- often, quite arbitrarily. AP, if it can't stop other sites' use of its content, may try at least to gain control over how traffic generated by these sites is allocated among AP's member newspapers. In effect, AP's members want more of AP's Internet-derived revenue. It doesn't necessarily follow, however, that AP can demand more revenue from online users of its stories.

Where does the "fair use" problem leave newspapers and other publications (print or online) that want to charge for their content on the Internet, having failed to create a viable business out of an advertising-only revenue model? It seems clear that they will not be able to block online competitors that pay editors to rewrite their headlines and content, as more and more news aggregation sites are now doing.

This is bad news for:

• Publications consisting mostly of articles whose primary economic value--meaning, what readers will pay for--is summed up in a story's headline and lead paragraph. This category covers many (but not all) metropolitan daily newspapers, as well as AP, Reuters and some other wire services.

But this is good (or less bad) news for:

• Publications that specialize in long-form journalism to which readers are drawn because of the quality of the writing (e.g., the New Yorker, Wired Magazine, and some parts of major daily newspapers).


• Publications whose content is dense with information of value to a discrete audience, defined geographically (e.g., local newspapers in small communities) or professionally (e.g., investors).


• Publications, including blogs, that are heavy on both opinions and thoughtful arguments, not easily summarized, to support them.

Newspapers and other publications, in deciding whether or not to charge for their content online, must ask the question of whether they have the legal right to block others from giving their content away. If the answer is no, their only option is to double down on their Internet advertising wager. If the answer is yes, more power to them.

Peter Scheer, a lawyer and journalist, is executive director of the California First Amendment Coalition, based in San Rafael, CA.

Comments

[A Better Tomorrow]

The recent NAA conference produced the usual whining but no practical solutions about how to resolve the issue described so well by Mr. Scheer. At the same time papers are failing there is absolutely no appetite for innovation. While other industries aggressively pursue innovation from all sources, everything from the X-Prize to open calls from inventors in the IP market, the newspaper industry is stuck rebreathing its fetid air. Aggregators like Newser are VC backed. I don't know any VC firms funding technology that will turn the tables on aggregators. Ultimately, it's the leadership of the Newspaper Association of America (NAA) and other trade groups that stood by and did absolutely noting to create an economic incentive for innovation that bares responsibility for the collapse of the industry.

[tailgateshirts]

The fact that google sends them 1000000s of visitors a week they should be paying google.

Thats FREE lead generation for their content subscriptions, many that would never go to that site without their being linked from G.

Getting a headline on G News will crash a server that is not ready for it, i would take that kinda traffic if they dont want it!

[josephXY]

Occasionally the media themselves are adding some real substance to the rather general discussions about the newspaper crisis:
For instance an article in the Irish Times not so long ago that came forward with the conclusion
that it was women who caused the credit crisis (no joke, link to this article provided via blog in case of disbelief):
"... Indeed, working women almost certainly caused the credit crunch by bringing a
second income into the average household, pushing property prices up to unsustainable levels."
(and more interesting insights into women)
A lady brought up this interesting piece in her blog:
http://wisewebwoman.blogspot.com/2009/02/barefoot-pregnant-and-in-kitchen-in.html

Now, I am not a woman. but I would suggest at least the fun question whether there are (hypothecical) reasons to sue the media for damage; not just for womens' sake but for more
comprehensive reasons.
A completely different analysis and conclusion about the credit crunch was, among many others,
provided by Greycourt & Co. investment advisers some time ago. Just in order to add some
substance:
http://www.greycourt.com/whitepapers/WhitePaper044-FinancialCrisis.pdf